The High Gas Prices Freakout Dance
The minute gas prices begin to rise, the high gas prices freakout dance begins. Gas-saving tips saturate the blogosphere, and how much everyone is spending on gas becomes a common topic around the office water-cooler.
In a way, this is understandable. No one wants to pay higher prices for gas, and if your income is low or you have an SUV and drive 200,000 miles in just a few years, increases can be very painful.
But for quite a few people, the price increases may not really be all that painful, looked at objectively.
Using random numbers as an example, suppose you get a 15 gallon tank of gas a week, and prices increase from $3 to $4. Fifteen gallons at $3 is $45, and at $4 it’s $60.
Yes, that’s a huge increase percentage-wise, but dollars-wise fifteen bucks is less than the price of one entree a chain restaurant. Finding $60 extra each month in a household budget is often doable without a ton of pain.
So why do gas price increases cause such a flurry of discussion and pain? I think it’s a combination of things.
First, most people view gas for their car as a necessity. They feel forced to buy it regardless of price, even though there ARE alternative ways to get around without using a car. So talking about the increases may be a way to deal with those feelings.
But the second reason is more interesting to me. I think that in many cases gas price increases have such an impact not because of the actual cost of the gas, but because of how we buy it.
We literally stand and watch the numbers at the pump increasing as we pump our gas. We’re never sure quite what the final hit to our wallet will be this time, but we watch the total rapidly going up, a tenth of a cent at a time, as we wait for the pump to shut off.
In other words, the connection between paying for gas and getting the gas is immediate. It’s not like paying for cable TV or a smart phone, where you get a $100ish bill once a month — a bill that you might pay without a second thought.
How much better-aligned with our personal financial goals might we be if more things were sold the way gasoline is?